Take Advantage of Every Opportunity
Learn to leverage your status as a minority-owned business to get the funding you need.
Becky O'Neil was at a creative crossroads in her career. Combining a strong entrepreneurial streak with training as a sculptor by the School of the Museum of Fine Arts in Boston, she was ready to start her own business. But there were challenges. "It's hard to have a fully outfitted foundry in your living room," she says--especially with three young sons.
So O'Neil took up her other love, sewing, determined to craft and sell one-of-a-kind handbags made with unique fabrics. Six years and thousands of bags later, Becky Oh! creations are still hand-sewn from her studio in Manchester, N. H., and swing from the arms of women across the U.S., as well as in Japan, Mexico and several European countries.
"The home studio is the best of both worlds," she muses, "I get to be home with my children and still be an international handbag designer." Success didn't come overnight. O'Neil admits the path was neither smooth nor clear-cut.
One thing was sure, right from the beginning. She leveraged her status as a woman-owned, small enterprise. While combing the internet for funding sources, O'Neil came across MicroCredit-NH, which helps the self-employed and small businesses with up to five employees, also known as microenterprises.
The organization offered a wealth of resources. "MicroCredit-NH provides business training, networking opportunities, as well as low-interest loans," says David Hamel, director of the program. Though entrepreneurs of either gender are eligible to apply to MicroCredit-NH, "The majority of our members are women," he says.
Thanks to the training, O'Neil learned skills that, she says, allowed her to operate more efficiently. That meant she didn't need to apply for a loan right away, but she's still planning to do so to expand her offerings. She also continues to search the internet for future resources.
"I had no marketing budget when I started, certainly not enough for a consistent print ad campaign, but by using online forums, local networking events and participating in MicroCredit NH's program," O'Neil says, "I was able to work out arrangements that benefited me and other women entrepreneurs for very little money."
Cyrus Sinor and Kai Yeh tell a similar story. Sweat equity got them started in 2002. But leveraging their status as a minority and veteran-owned enterprise helped International Public Work, LLC, an engineering and construction firm, break into a solid and successful niche market--military projects--and grow into a $19.5 million business.
Veterans of the Army and Navy respectively, Sinor and Yeh saved for three years before opening their doors. "Then we didn't take a paycheck for over a year. We literally saved every penny we earned in anticipation of future growth," Sinor notes. In the fourth year, he and Yeh began applications for state and federal certification to gain a competitive edge for projects. Preparing the package and undergoing the SBA's review process took another year, but the owners feel it was worth it.
"Any status, whether it's small business, veteran, HUBZone or minority, gets you the opportunity to compete and limits the field to similar competitors," says Yeh, though he cautions that it's no guarantee of success. "Too many new, small-business owners get the wrong impression that these certifications will be an easy way to be successful. It is still up to them to complete the project as contracted."
He advises other similarly designated businesses to scour the internet for potential projects. One of the best sources he's found is FedBizOpps, a website with free listings of all procurements run by the federal government. Similar websites can be found for state projects, he says.
If the amount of information seems overwhelming, Sinor says there are consultants to assist with both certification and procurement. Janet Christy, author of the book Capitalizing on Being Woman-Owned, advises both minority and women business owners on preparing state and federal certification packages.
"Go ahead and get the applications going," she recommends, "even while you look for projects to bid on. You can always say you are in the process of getting certified. It gives you a competitive advantage, especially when the agenda is to support specific disadvantaged businesses."
That's the agenda for a new Michelin program. The beneficiaries will be the socially and economically disadvantaged businesses in the 10-county region in South Carolina where Michelin's North American headquarters is located. Michelin will offer low-interest loans as well as business expertise.
"We believe that having access to Michelin's considerable business expertise will increase our clients' ability to create jobs and improve their economic well-being," says John Tully, president and COO of Michelin Development Co. "This access to our business expertise has been credited with no defaulted loans in Ontario, Canada, where a similar Michelin Development program just completed its active phase."
Certification is not required to qualify for these loans, but Tully recommends creative thinking across the board when it comes to funding. "Don't be afraid to seek out other available resources. Most communities have resources available to help with advice as well as money."
Eileen Parker did just that before she launched Cozy Calm, a business that produces weighted blankets to aid relaxation and sleep. Parker contacted her local community development agency, the Metropolitan Consortium of Community Developers.
"Their small business development consultant advised that I could qualify for a small business loan through their agency, but that I should pursue the grant money through rehabilitation services first, since I am disabled." The state of Minnesota offers qualifying small businesses grants of up to $7,200 for disabled owners. "MCCD also offers business consulting at no cost," Parker says.
"A rehabilitation services grant is not an unemployment bailout. A napkin business plan, a sense of purpose and enthusiasm will not qualify you," says Parker, who is already enjoying brisk sales. "A business plan consistent with all financial statements is required and must be approved by a review board and a business banker, since the criteria for approving the grant are the same as for a bank loan." She is also pursuing certification for being a woman-owned enterprise to assist with further opportunities for growth.
Janet Christy believes that because competition is stiff in any industry, business owners who capitalize on their status are better prepared to gain market share, as well as qualify for special funding. After all, Christy quips, "You wouldn't go to war with just a knife, so why not use every weapon in your arsenal?"
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